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Carlyle-Backed Hedge Fund Bets Against Turkish Currency

Mar 04, 2014

Jing Chen

Hedge fund firm Emerging Sovereign Group is betting against the Turkish currency and on higher Turkish interest rates.

New York-based ESG, which was majority acquired by The Carlyle Group, explained in a letter obtained by Bloomberg that “Turkey had all the ingredients for a textbook balance of payments crisis” and added that it does “not believe that the central bank finally succumbing to market pressure and adopting a more orthodox monetary policy will be enough to stem the pressure on the currency.”

The Turkish lira has fallen about 9% against the euro since December 16.

Founded by Kevin Kenny in 2002, ESH was seeded by Julian Robertson’s Tiger Management. It manages about $5 billion in assets.